This is in another post but is worth its own topic. After all what other airline is buying planes in today's market?

Qantas to buy 17 planes

From AAP
18oct01

QANTAS has announced plans to buy 17 new aircraft and raise $300 million in ordinary equity.

Qantas said it would buy 15 new generation, long-range, narrow body aircraft and two Dash 8 aircraft as part of a comprehensive revamp of its domestic operations.

It would also raise $300 million of equity through a global bookbuild placement to domestic and foreign institutions.

Qantas chief executive Geoff Dixon said the new aircraft would allow Qantas to provide permanent additional capacity and enhance the range of services for travel in Australia, including to regional destinations.

The aircraft will be either Boeing 737-800s or Airbus A320s and the total cost of the acquisition will be in the order of $1.5 billion, including start-up costs.

In order to partly fund the acquisition of the new aircraft Qantas will raise the $300 million in new equity.

In addition, all eligible Qantas shareholders will be able to purchase up to $3,000 worth of shares through a special Share Purchase plan at the same price as the shares issued under the placement.

The airline, which recently saw its domestic market share spike to 85% following Ansett's problems, expects to decide next week whether it will buy Boeing 737-800s or Airbus A320s.

The first two aircraft are scheduled for delivery in January followed by another two each month after that.

Qantas also will take options for at least a further 40 narrow body aircraft at current prices, it said.

"The domestic market has changed fundamentally and irrevocably over the past year and our new strategy will enable us to meet the increasing customer focus on flexibility while in no way reducing the quality of the Qantas product or service," said chief executive Geoff Dixon.

Short term measures introduced when Ansett first stumbled will be gradually discontinued as services from the growing Virgin Blue airline and other carriers expand.

Dixon added that the all-economy class fleet and the lower operating costs of the new aircraft will help lower Qantas' cost base.

"This is essential given the state of the global aviation industry, including the significant recent rises in insurance and security costs and aviation charges," he said.

"We also need greater productivity and lower labor costs to compete effectively worldwide," he said, noting that the company is set to meet with unions Monday.

Earlier this month, Dixon noted in an internal memo to staff that Qantas needs "to prepare for a world that will see hundreds of millions of dollars of costs (e.g. insurance, security) added to the Qantas bottom-line from the aftermath of the Sept. 11 terrorist attacks."

These 737-800 or A320 aircraft will be configured in an all economy config. Qantas promises that aircraft flying on the big city routes SYD-BNE etc. will continue to offer a business product. Qantas says that the all economy choice on some aircraft is due to the fact that not enough business travellers choose to fly on the smaller routes. Will be interesting to see which one they go for, 737-800 or A320.

My guess is the A320. Afterall Qantas was trying to acquire 10 of these from Ansett...

but almost 100% sure they will be 738s. They are available more rapidly than A320s and the overall cost of acquiring and integrating 738s into the system is far less than that of the A320s(CCQ or not with the 330s).
This is a business decision and not necessarily a reflection of the 738s superiority over the A320. They are both outstanding aircraft. So, a minimum of 55 new narrow-bodies with 15 firm and at least 40 options at today's prices.

My guess is that the business will go to Boeing. Airbus has a large backlog and lower production rates, so Qantas would have to wait longer for the 32x's. Also, Boeing has been hit harder by the aerospace slump, so they'll be more desperate to sell the planes, too.

This is assuming there is no technical reason to favour one or the other.

MELBOURNE, 18 October 2001: Qantas Airways announced today that it will purchase 15 new generation, long range, narrow body aircraft and two Dash 8 aircraft as part of a comprehensive revamp of its domestic operations.

Qantas Chief Executive Officer Geoff Dixon said the new aircraft will allow Qantas to provide permanent additional capacity and enhance the range of services Qantas offers for travel in Australia, including to regional destinations.

The aircraft will be either Boeing 737-800s or Airbus A320s and the total cost of the acquisition will be in the order of A$1.5 billion, including start-up costs. Negotiations have been held with Airbus and Boeing over the past three weeks and there will be a decision on the aircraft type next week.

The first two aircraft will be delivered in January, with two aircraft delivered each month after that.

The new aircraft and new fleet strategy will give Qantas between 65 per cent and 70 per cent of the capacity in the Australian domestic market.

In order to partly fund the acquisition of the new aircraft, Qantas today announced it intends to raise $300 million of ordinary equity through a global bookbuild placement to domestic and foreign institutions (see separate announcement).

Mr Dixon said Qantas' revamped domestic operations will feature:

- the 15 new narrow body aircraft, with an all economy class configuration of at least 165 state-of-the-art slimline seats, operating on services where there is small or no demand for business class travel;

- reconfiguration of a number of existing Qantas Boeing 737 aircraft to create a total fleet of about 40 all economy class aircraft;

- regular two class Boeing 747 services between Perth and the East Coast of Australia and on long haul leisure routes;

- a significant increase in direct flights between capital cities with fewer stops at ports in between;

- continued business class services across the domestic network, between major centres and where there is sufficient demand;

- an extension of the extremely successful Cityflyer service, which currently operates between Sydney and Melbourne, to Brisbane;

- expanded Qantas Club lounges;

- enhancement of the Frequent Flyer program with additional partners;

- the all economy aircraft offering the new Economy Class "box" meals launched successfully in June this year.

Qantas will also take options for at least a further 40 narrow body aircraft at current prices as part of its long term fleet strategy.

"The domestic market has changed fundamentally and irrevocably over the past year and our new strategy will enable us to meet the increasing customer focus on flexibility while in no way reducing the quality of the Qantas product or service," Mr Dixon said.

"Currently, we have about 85 per cent of the domestic market because we have moved quickly, at the request of the Federal Government, State Governments and tourism authorities, to put in place short term measures to help hundreds of thousands of stranded Ansett customers, other travellers and the Australian tourism industry.

"As we have said previously, we will gradually discontinue these interim arrangements and services as Virgin Blue and other carriers grow."

The acquisition of two Dash 8 aircraft will increase QantasLink operations in regional Queensland and further boost QantasLink's overall services to regional Australia.

"This latest commitment to regional Australia by Qantas follows the recent introduction of Boeing 717 services into Hobart and Launceston," he said. "This initiative increased capacity into these cities by 26 per cent and also allowed us to boost services within Western Australia by transferring two BAe 146 aircraft to that State."

Mr Dixon said the all economy class fleet and the lower operating costs of the new aircraft would assist Qantas in its efforts to lower its cost base.

"This is essential given the state of the global aviation industry, including the significant recent rises in insurance and security costs and aviation charges," Mr Dixon said.

"We also need greater productivity and lower labour costs to compete effectively worldwide. We are meeting with all Unions represented at Qantas on Monday to discuss how we can achieve lower costs to maximise long term job opportunities at Qantas."

Mr Dixon said that while the terrorist attacks on 11 September and subsequent events in Afghanistan had not affected Qantas as severely as many other airlines, the downturn was still significant.

"We are closely monitoring all our international routes and have already reduced capacity by almost 10 per cent," he said. "This will result in some reductions in staff.

"We also have the capacity to retire aircraft from our international fleet quickly. This option will be taken if there is any further deterioration in international travel."

This announcement has been prepared for use in Australia and may not be released in the United States. This announcement does not constitute an offer of securities for sale in the United States. Any securities described in this announcement may not be offered or sold in the United States absent registration under the US Securities Act or exemption from Registration.

Here's a couple of interesting reposts from pprune
to keep the 737-800 vs A320 possibilitys going:

edster
Just another number

Member # 37151
posted 18 October 2001 07:08
--------------------------------------------------------------------------------
So. 737 or A320. Lets have a guess.
Its now Oct 18 and deliveries of the first 2 take place in January.
1.A320. How do you have at least 12 crews plus supervisories, up and trained by January. And from a dead cold start.
2. B737 NG. A short "differences" course for all your current 737 jocks and you are away.
Anyone taking bets on the big secret???
--------------------------------------------------------------------------------
Posts: 24 | From: sydney | Registered: Jul 2001 | IP: Logged

Alotta Fagina
Just another number

Member # 13730
posted 18 October 2001 07:27
--------------------------------------------------------------------------------
Thats why AWAS are looking for crew to start in DEC on the A320 - 2 year contract while QF crews are trained up.
Airbus is lobbying hard to get their products sold in Oz (one of the few places in the world actually in demand of aircraft) and will do anything (crew training, engineer training, spare parts) to be successfull.

An A320 will be arriving today in Oz as a demo - something tells me it wont be for AN. It will be in UA colors with v2500 engines.

But, on the flipside, Boeing are keen to see QF ditch their order for the 330 and take up 777's instead. You know that rumour doing the rounds that the 330's are on thin ice.

Boeing will win this one. I believe that for speed's sake, QF will take the B737-800. As pointed out, the B737-800 is available quicker. Note the QF press release. "At least 165 s-o-t-a slimline seats (which means the seats found on the B747-400's (without PTV's)". The ONLY way this can be done is if the aircraft options are the B737-800 or the A321-200. The A320 can't take 165 (AN has 144 in the A320).

And no matter what Dixon says, this is out to crush AN, and even DJ. All economy shuttle type service (even to the extent of the food boxes), AN should try to fight this with a similar product.

Note the non-mention of the B717's. Does this mean that they will be "gone"? If so, McGowan is in the deep brown stuff. If we take the wages freeze that Dixon is trying to get out of the unions, you'll see there's no need for the 717 in the QF fleet.